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In May, ""Treasury"":http://www.treasury.gov/Pages/default.aspx announced exit strategies to wind down on the remaining investments it still holds from the Troubled Asset Relief Program (TARP). One of those strategies involved a second round of auctions to sell off preferred stocks it holds. On June 25, Treasury began the public offerings and announced Thursday it expects proceeds to be $204 million from the sale of preferred stock in seven financial institutions.
[IMAGE]The seven institutions were Fidelity Southern Corporation, Firstbank Corporation, First Citizens Banc Corp, MetroCorp Bancshares, Peoples Bancorp of North Carolina, Pulaski Financial Corp., and Southern First Bancshares.
[COLUMN_BREAK]Treasury stated in a release that the sale is 11 percent above the minimum prices set for the auctions.
""We again saw strong demand in these auctions, which brought in new private capital to help community banks replace temporary government support,"" said Treasury Assistant Secretary Timothy G. Massad. ""Moving forward, we believe that the strategy we've outlined for winding down these investments will help support our nation's community banks and provide an additional positive return for taxpayers on TARP's bank programs.""
Last month the department said that in addition to sales, it plans to use repayments and restructurings to recover remaining investments.
The current offerings are expected to close on July 3, and in late July, Treasury stated it intends to announce additional individual auctions of its preferred stock investments.
The department still holds investments in 335 banks, most of which are smaller, community lenders. TARP, which began in 2008, is a taxpayer-funded government program that allows Treasury to purchase investments from financial institutions to strengthen the market.
After investing $245 billion, Treasury stated it has recovered $264 billion from TARP's bank programs to date through repayments, dividends, interest, and other income.
